Information services are just that: services. Even if you call your customers subscribers and deliver your product to them by mail, in the end you’re performing a service on a regular basis in exchange for regular payments. You’ve crossed the boundary between products and services even further if you’d be pleased as punch to do some occasional custom consulting work on top of the subscription services you offer.
So, how is running a service business different from running a product business? Here are a few key areas:
Transparency: How a service is rendered is important to customers. Just as a restaurant’s customer might ask whether might ask whether ingredients are free range, fair trade, or organic, the buyers of outsourced services routinely ask whether service firms adhere to ILO regulations on fair compensation and work hours. Consulting customers also often want to know who else your firm works for and what you do for them so being as transparent as you can be about this information (without violating client confidentiality) is an important part of establishing trust with a customer.
Methodologies: Consumers of products often do not want to know “how the sausage is made,” but service customers can be very interested in the methods you use. Take a competitive intelligence project, for instance. A customer would rightly be very concerned if a vendor’s methodology included illegal appropriation of a competitor’s protected materials because the deliverable would then be unusable or potentially even evidence of a crime.
Responsiveness: The essence of service businesses is their ability to respond to customers’ issues. Response times for technical support, emailed inquiries, and other types of requests are short and there is substantial pressure to make them even shorter. Self-service tools that enable “information on demand” help to address this need, but customer requests frequently come with both ambitious scopes and tight turn-around times. As Russell Perkins recently said: speed is the next frontier for data content.
Return on Investment: The “value” of a service is one of those things that few customers expect a supplier to be candid about even if they do make some of their own pricing information somewhat public. From the buyer’s perspective value is the essence of the purchasing decision so “doing the math” on the ROI for an investment in the services rendered to your customer is key. Don’t just say your price is better than what your competitors are offering. Rather, you need to understand your customer’s business well enough to be able to say “You paid X and now you can turn around get an ROI of 4X from your customers.”
All of the above aspects of the service industry can be challenging, but they can be addressed through adequate planning and open and honest dialogue. Unlike product sales where a one-off purchase can be the end of the commercial relationship between two parties, service sales are multifaceted interactions that can continue to grow and deepen over time forming a strong bond between customer and supplier.